Bitcoin Forum

What do you think vendors who accept cryptocurrency as payment (for non crypto services - just your everyday coffee shops & retailers) do with the digital assets - HODL VS SELL? Its easy for traders and independent investors to hodl and stay put during the volatile times. But businesses have monthly expenses to upkeep id imagine it is very hard for them to stay operationally stable if their main source of revenue came from a highly volatile asset; 10 cups of coffee are worth 50$; the coffee is paid for in BTC, two days later the same BTC is only worth 30$ and they just lost 20$ on the sale, i could see this being very problematic in the efforts to increase the mainstream adoption of cryptocurrency.

I think if bitcoin payments are a small part of their revenue it is more likely that they hold. If most of their revenue is in bitcoin it is quite likely that they have to convert that into fiat because they risk a fast dip and not being able to pay their taxes, suppliers, etc.

A lot of businesses that claim to accept Bitcoin actually use services of companies like BitPay that receive BTC on their behalf and immediately convert it into fiat for the merchant. So, it's like they instantly sell. I heard that some companies keep certain percentage of BTC that they receive, but those companies are crypto-based in the first place, so it's not surprising that they have more faith in BTC than non-crypto vendors.

Bitcoin Payment is still not a develop mode of payment. In stores payment is almost zero due to long confirmation time, we can basically see such payments in internet services via CoinPayments, etc gateways. This indicates that only those businesses accept Bitcoin payments who have basic understanding of Bitcoin, so in my opinion they only favor Bitcoin payments because they like to generate passive income from reserves. So YES, they usually HODL.

Secondly, it can also depends upon the time and circumstances in which they receive payment. If they received in bullish market and made profit from HODLing, they might hodl their future receipts too. Whereas if they faced loss from past HODLing, they may instantly sell Bitcoin received as receipts.

If their revenues are based mainly on BTC and they do not expect to receive any fiat, then it’s likely that they would sell the BTC. I don’t think it would be very wise for a merchant to hodl their BTC unless for personal reasons. It’s still very risky because of how volatile bitcoin is and that they may not be able to attain an ROI if the price of bitcoin suddenly plunges. Unless they engage actively in the trade of bitcoin, businesses are still heavily reliant on fiat.

If the shop owner is a pro cryptocurrency enthusiast then he will think that the income from selling the coffee for crypto is in his investment portfolio and will never sell the coins for cheap price, I.e. In a down market and will sell his coins once the price goes above which he got those bitcoins or any other cryptocurrency. But many shop owners accept cryptocurrency thorough a payment processor or a mediator so the crypto goes to the company and the shop owner gets the equivalent funds in his account minus the percentage they charge.

It depends on the type of business that they are running. To give you an example, a business that doesn't need fiat to operate will not be forced to use exchanges. Some examples are crypto casinos, services like bitcoin mixers, people who are getting donations in BTC, like streamers, youtubers. They don't have to convert and actually will be inclined to hold, especially now when price is low. On the other hand if you're running a restaurant that accepts BTC, you will have to convert to pay your employees and buy products.

For these kind of businesses (with a BTC beliver boss) can be a solution that they only sell the amount of BTC that cover their expenses/costs and their margin (the profit) can remain in BTC. This can be a solution for holding at least a little part of the incoming BTC, and it can cause huge profit if BTC price goes up, and huge loss if not...

what you said is true but it also depends on the  business owner whether he is rich or poor as if he is rich then he wont need fiat currency much and can hold the coins and sell it on high.

It all depends on what type of business it is and how much knowledge the owner have. If he knows the value of bitcoin then I think they won't sell soon until their is any need of fiat currency to full fil the needs. More business accepting bitcoin will make btc spread more awareness

I bet not everyone who come to your store will pay btc, and If I am the merchant I would not accept btc as the first payment option either.
To answer the question, they are a business man right? They do business to generate profit. So, in your thought, what would be the best thing that a business man do to his btc to generate profit? And, regarding with couping up with the daily expenses to the store, I would not accept btc payment anymore if I have enough of them already, you do the balance financially. Business men knew this, so only them could answer this in a more perfect manner. Just giving my 2 cents.

They obviously sell it off. From a business point of view, they should sell it because like it or not, most vendors that accept crypto as a payment just do it to attract people,as a marketing strategy. Hodling is not a business thing,its an investor type of thing. Although it may differ depending upon the type of business. If it is large scale business, they would have a tie up with bitcoin buyers and banks, and whatever payment they receive is immediately cashed out. But if its like a small business like say a grocery shop, and if he really is a crypto-enthusiast, he'd not sell now, but later when the market is bullish. He would be thinking as a grocery shop owner and as an individual investor/trader and will do what would be the best for his business.

That only happens if though businesses chose to hold with their entire coins.

But what happen is that when someone paid them with bitcoin, they are selling it immediately / converting it to USD so there would be no problem about volatility.

It's about the real use of bitcoin as an alternative payment and if the owner decides to hold, it's his decision.

The question is, why do they accept btc payment, knowing that they have a risk of getting your business involved in crypto? Of course, it depends on their business strategy. They probably will not sell if they lose. They are probably sell thier btc, if the profits makes 2x or more. Business will probably shutdown if they sell in this bear market.

I think that's a problem retailers always encounter when using bits of bitcoin, but I think if we do it when bitcoin prices go down with so many purchases of our goods and we hold bitcoins therein lies our advantage.

No point in holding for them; for merchants and in business in general, money needs to flow. They simply made themselves  and their services more reachable by accepting bitcoin as payments but they are not necessarily holding because they need to pay for other expenses like electricity, rent of space and other utilities.

they are not accepting crypto/digital asset/.... they are accepting bitcoin as payment. and what they do with it depends on which business you are talking about. for example most of the big ones with a lot of liquidity (like Steam for instance) aren't even receiving bitcoin directly. they go through a payment processor like BitPay and they receive the fiat equivalent.

but those other merchants that are accepting bitcoin directly (like the coffee shop you mentioned or i knew of a food truck that has been accepting bitcoin) are not directly selling bitcoin. they keep it and maybe sell some portion of what they have received to cover some costs and get the profit but not all of it.

as for the problem obviously those big ones that receive the fiat through BitPay aren't worried about price. and others aren't worried about the price enough to want to do anything else. it is a risk they are willing to take and that risk has been rewarding them greatly so far.

If there are some businesses or stores accepting Bitcoin payments, I think they intend to hold on until the price of Bitcoin increases dramatically and sells.
Because no business will accept strong currency fluctuations and that will make sales very difficult to control.

Though you have pointed out that problem over there but that doesnt mean its the last option. I mean to overcome the loss per sell they should be (ideally) holding their bitcoin assets or whatever crypto in which they got paid. This way they will be supporter of the crypto currency and market will be stable. If they dont like this kind of option then they are always free to sell their tokens immediately after they get it and make the sell right one. The only thing they will do this is attract more people to come and use the crypto currency.

In that case maybe they will hold at the moment because ofcourse they had an emergency funds for that. Accepting crypto as mode of payment they already know the pros and cons of it ofcouse. They will not go into it if they didn't study it well and what if the business who accepts bitcoin from january2017 to october 2017 and sell it in december and the profit they got are the funds for emergency no doubt they do that.

Your merchants that are Bitcoin enthusiasts, will probably hoard some coins, depending on their liquidity and profit margins. They have to pay their expenses first and then decide what percentage of their Net income must be hoarded in Bitcoin.

Some of the Payment processors give you the flexibility to indicate what percentage of your coins must be converted to fiat and what percentage of the coins you receive must be kept in Bitcoin. 

Are you really new in the forum?  The term HODL you  are using is taken as joke in the initial stages but you took it seriously so I just asked it.
So whether the traders which are accepting crypto in exchange to their transactions are just HODLING or selling their crypto stocks?  A businessman can never retain the money with him in liquid form because he has to repurchase the goods and other services for business.  If he just holds the money received how he will buy the raw materials to trade.
But it may be possible that certain percentage of their sales which are profits and surplus after meeting their expenditure they may be HODLING as investment to gain in the case of price rise.

it is obviously that like people who buy bitcoin not every business/vendor/merchant does the same thing. they  have different views, different risk managements plans and different goals, they also have different number of payments (for example someone may get 1 BTC payment among 1000 fiat and someone may get 100% bitcoin payments only and no fiat).

as an example imagine someone who wants to invest in bitcoin and has a shop. he can simply add a "Bitcoin is accepted here" sign and receive bitcoin payments instead of receiving fiat and then using that fiat to buy bitcoin. so the payment he receives won't be sold.
this is somewhat like what most of us do. we earn bitcoin and hold that earned money instead of converting it back to fiat. so that is kind of the direct investment without the hassle of going through exchanges.

To be honest, if we just put ourself on the feet of a vendor, we probably hodl the bitcoin we've received as a payment and wait for the market to pump. Businessman and/or vendors are smart enough to choose bitcoin because it may flactuates and may take that opportunity to atleast get a profit out of it.

To be honest, price volatility is the biggest obstacle to the growth of Bitcoin especially among the merchants because they won't get the same amount at the end of the week and it will affect the cash flow. However, there are some exchanges in my country and they tried the new experiment of assisting merchants in accepting Bitcoin as a payment system and the immediately cashed out the accepted payments and sent it to those merchants. This might not be the ideal situation expected by Satoshi but it was definitely a good start towards that vision.

  I think those businesses that accept bitcoin as payment are already aware that it might happen to them. So,i believe they are highly risk taker before they put up this kind of business. They already know that crypto market are so volatile,the price may drop at any time or it may increase. So, I think they have an alternative plan when time like this comes on their way.

I think it depends on the business, but generally businesses need to liquidate such holdings to cover continuous expenses such as labor, rent, maintenance, etc. Whether the bitcoin is held long term is up to the individual owner, but most businesses need the cash right away.

However, there are some exchanges in my country and they tried the new experiment of assisting merchants in accepting Bitcoin as a payment system and the immediately cashed out the accepted payments and sent it to those merchants.